Key Takeaways
- Digital Turbine stock fell 12% after the company pushed its fiscal second-quarter report back a week, to Nov. 9, to finish reviewing its financial statements.
- Investors are nervous because the company corrected an error in its first-quarter release in August, which widened that quarter’s GAAP net loss.
- The business looked strong last quarter, with revenue up 27% and full-year guidance raised.
- The Nov. 9 report will show whether today’s drop was overdone.
Digital Turbine (APPS) stock sank 12% this morning, and the company didn’t report a single number to cause it.
Instead, just before the open, it pushed its earnings back a week to complete its “review and finalization” of the quarter’s unaudited financial statements.
Digital Turbine will now report its fiscal second quarter (ended Sept. 30) on Monday, Nov. 9, instead of Nov. 2. CEO Bill Stone and Interim CFO Josh Kinsell will host the call.
It gave no preliminary figures, and no word on what the review covers.
Why the market is nervous
A week’s delay can be simple paperwork. But Digital Turbine’s books needed extra work just three months ago.
Shortly after reporting its first quarter in August, the company reissued the release to correct an error it called immaterial, tied to liabilities from a past acquisition. Revenue and adjusted EBITDA didn’t change, but the GAAP net loss widened from $3.2 million to $11.3 million.
So when the company, still with an interim CFO, needs more time on the next quarter, I can’t blame investors for selling first.
The balance sheet raises the stakes. Digital Turbine has carried far more debt than cash for years:
At the end of June, that was about $353 million of debt against about $43 million of cash. With that much borrowed, investors need numbers they can trust.
TIKR tracks 5 analysts on Digital Turbine. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Digital Turbine, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Digital Turbine’s Analyst Ratings
The business looked fine in August
First-quarter revenue rose 27% to $166.0 million, and adjusted EBITDA jumped 69% to $42.5 million. Management raised its fiscal 2027 (the year ending March 2027) revenue guidance to $650-$670 million, from $630-$650 million.
Here’s what analysts expect for revenue this year and next:
And here’s the multiple the market has put on Digital Turbine’s earnings over the past five years:
At today’s price, it’s even lower.
My take: August’s fix left revenue and adjusted EBITDA alone, and if this review ends the same way, today’s drop will look overdone. But this is the second time in three months the quarter’s books have needed more work, so I’d wait for Nov. 9 before buying the dip.
Of course, that report could settle it in an afternoon. Clean numbers and guidance intact would make the $17 target Northland set on Thursday, nearly double today’s price, look a lot more reasonable.
So what is Digital Turbine stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
